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tv   [untitled]    February 7, 2012 2:30am-3:00am EST

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discovered in libya ok britain's six try agency in the rendition of dissident when they take the whole truth alteration into the broader. context. plus greece it's occupied since between two thousand more jobs to meet its international creditors and the austerity drive its population status and to demonstrate. and staying with the world economy max and stacey take a look now at how currency wars are heating up around the globe is the kinds of reforms. kaiser this is the kaiser report the currency wars are heating up around the world stacy manx there are so many super committees and super bodies that i thought we here should form one on the kaiser report which is why we have the same exact
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shirt on oh great michelle little they will pull through tags. will all the super committees and super bodies are in the news super committee that runs america urges and to the zero bound demands issuance of negative yield bonds so the treasury borrowing advisory committee has demanded that quote it was broadly agreed that flooring interest rates as zero or capping issuance proceeds at par was prohibiting proper market function the committee unanimously recommended that the treasury department allow for a negative yield auction results as soon as logistically practical that's right leave britain predicting this for really almost the entire duration of the show that the zero percent interest rates would give way to negative interest rates so that means that the bank takes two percent of your money every year just for
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keeping your money at the bank or the treasury bond issuance they issued the bond day one last you were in a losing position from the second you take possession and this is a way again to confiscate wealth to protect bankers and it's no coincidence that this comes this news comes after the m.f. global scandal because they were testing the waters with m.f. global if jamie diamond and j.p. moore again and john corps i could confiscate people's customer money out of their accounts just steal. or money and nobody did anything about it then of course they said ok we're going to issue negative negative return bonds and negative interest rates and the confiscation now is in full force zero hedge reckons that this is j.p. morgan and goldman sachs who are pushing for this and say and what j.p. morgan and goldman sachs want j.p. morgan goldman sachs get and once we get the green light on negative yields at auction next up will be the push for the fed to impose negative rates on all
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standing securities which means that coming soon savers will be literally paying to hold cash and that will be the final straw it's just confiscation of your money it's fascist regimes in the past have not hesitated to just confiscate people's wealth the resulting impoverishment ends up in creating state sanction or in this case bank sanctioned ghettos and then there's the beginning of a financial program which a financial hole cost and this is the program in place no those who have gold and silver of course are going to be the only survivors as we've been saying on the show for a number of years as well so the fed doesn't believe in the dollar clearly because they want to be confiscating the capital like this here over in europe buddhist bank thinks deeper into debt saving europe so germany's buddhist bank has entirely
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exhausted its stock of private assets and run up a quarter of a trillion euros in liabilities propping up the euro zone system testing the political limits of e.m. you solidarity in germany the operations of incurring all this debt are part of the european central banks target to network of automatic payments between the national central banks of the euro land club the bank has already provided four hundred ninety six billion euros to countries in trouble chiefly greece ireland. italy and spain no one in the bank has plenty of room it's rent their interest rates are two or three percent they can lower them down to zero percent d.c.b. can say gone many more trillions of dollars worth of bad debt and remember folks it's all legal now the article mentions professor westerman who says that the e.c.b. is also printing money and that their latest lending has not been quote unquote
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sterilized and amounts to money creation while it has a vertical banking crash the move is double edged and could intensify the crisis since the bank cannot ensure that extra liquidity stays in the club med block professor westerman sees a moment when all that money all of that extra liquidity currently sitting in the club med region italy and spain and france that it could all come rushing back into germany and they call it the tidal wave of liquidity quote if everybody tries to get out of crisis states at the same time this will overwhelm target to in principle a speculative attack could occur within a day we are heading towards the multiple equilibria zone in which beliefs of a breakdown of the euro zone are self-fulfilling no i. don't forget deutsche bank. is the goldman sachs j.p. morgan you see bacon absorbed many many trillions of this junk without breaking
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a sweat and remember folks it's all legal what germany is doing it's all loophole so the next headline also from ambrose everand pritchard from the telegraph says the perils of mario drags one point five trillion euro blitz a disturbingly laura number of credit experts warn that the e.c.b. lifeline is not the game changer that the markets seem to think cannot in itself save the euro land and may prove counterproductive perhaps soon suddenly all these credit experts are thinking hey. all of this lending to the banks these trillions and trillions and trillions of dollars and euros and fake currencies around the world all of it actually may blow up because i'll bear to gallo from r.b.s. says drag is four hundred eighty nine billion euro loans to banks at one percent for three years the l t r o is having all kinds of toxic effects which is disturb and giving that the financial times splashed
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a headline that the banks may draw down another trillion euros at the second l.t. are in late february well what they're not taking into consideration is that all of this debt is off the balance sheet and all the income is used immediately to pay off debts of bank of near and germany so germany has effectively to seize control of grace they've seized control of portugal they will soon be totally in control of spain they're totally in control of the earth zone it's all legal remember they put all that bad debt off the balance sheet as keep interest rates at zero percent interest rates were to rise of two three four five percent of course the game was over but that's never going to happen because there's no stopping the creation of credit default swaps and other derivatives that are used to keep interest rates artificially low so you don't have that risk so as long as they can create trillions hundreds of trillions of dollars worth of derivative though you don't have interest rate risk you have political risk in the countries that are not germany germany doesn't have a political risk because they are europe alberto gallo from r.b.s.
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goes on to say that he expects five trillion euros more indeed leveraging by european banks before it's all over so anybody who thinks there's inflation is wrong however this is massive deflation which is often the predecessor to hyperinflation massive deflation which is used to keep interest rates at zero percent william flay should come along though because there is no. the tolerance for that in germany they don't like inflation the member why more republic there are anti inflation so they will continue to run the entire game with they own all the pieces on the board in the europe zone and when the dollar crashes then germany's going to own the dollar as well germany is the true superpower here not china china is apple's keep manufacturing hub
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power per se germany is a natural powerful country but this five trillion euros deal leveraging in a deflationary environment cash is king if you have money you're happy many germans have huge amounts of gold many chinese have a lot of gold relative to their income so they'll be happy in spain in greece in the u.k. in ireland the citizen formally known as the citizen now known as the consumer they have a lot of debt. well it's a chinese people are unruly that's not going to serve them well in the currency wars their government is going to have their hands full but remember going forward that real burden of debt in a deflationary environment the burden goes up so all of these debtor nations isn't going to get worse now you and i have been to athens and we've seen that those
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people you know you can talk all you want about germany and how herad they are but they've got to contend with those greeks and we saw those greeks and. i have to say we were interest where as well and the people in athens were far angrier than during the egyptians during their uprising well as was reported on zero hedge this past week greece is now answering re entering the feudal period and the economy is so crushed you literally have a nation of disenfranchised and then forming peasants who have complete inability to mount any offensive whatsoever and then i have a final headline here about greece i.m.f. official admits austerity is harming greece poll thompson head of i.m.f. mission in greece concedes that social tolerance and political support have their limitations in an extraordinary departure from the script to the i.m.f.
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is followed to date the danish official who is also in charge of the i.m.f. program in place in portugal acknowledged there was a limit to wall what society would endure he said quote while greece certainly will have to continue to reduce its fiscal deficit so we want to ensure considering that social tolerance and political support have their limitations that we strike the right balance between fiscal consolidation and reforms as such the i.m.f. had cautioned against an excessive pace official of fiscal reduction so this goes with your theme that the u.s. and and germany are at the heart of this global neo feudal system when it was when these austerity programs were imposed fora way down in latin america or asia the germans and the americans felt and the french felt safe issuing austerity measures because they weren't anywhere near the peasants who would riot here athens a little bit too close i think to berlin you know their opportunity was last year
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to have a coup to top and get rid of happened and they could have been put in a populist government and they could to save themselves but they failed to do that so. it's finished for them ireland some really is toast no hope for them whatsoever portugal under the bus spain no italy they have twenty five hundred tons of gold if they can hold onto it they're in good shape but i suspect that the current government will sell that italy's gold deal with the i.m.f. because they're totally corrupt and this leaves only germany if at the end of the day well max this super committee of blue shirts i think we've decided. heart on the final say here christine legarde she was up and i think she had it right you know here we saw that greece is no longer going to have these austerity measures or the i.m.f. is afraid of it christine legarde also said and davros that portugal spain all the rest of europe all these peasants they're a little bit too close to paris london and berlin and maybe they're
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a little bit too afraid of austerity measures here want let's talk more about that stays there or thank so much being on the gaza report thank you max don't go away much more coming your way stay right there. as the twenty. i just cry says poisons the union. profiteers have more power than people. of free trade blocs stretch from the greet . us twenty.
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welcome back to the kaiser. max kaiser and from santiago chile gonzalo lehrer welcome to the kaiser report and it's always a pleasure thank you all right so you're a bit of an expert in the area and one of the hallmarks of the i.m.f. and latin america we were talking about there in the first half was austerity which they used to call structural adjustment policies just before siri are the i.m.f. wants europe against implementing further us terry so what's going on here well it's basically you know they want to squeeze a little countries such as greece portugal and ireland especially but the big ones there are sort of fraid of they're basically afraid of italy and spain basically telling the i.m.f. and the e.u. to stuff it and exit in the euro zone all together and so that's why they're treading very carefully now they're doing this about face that oh austerity is great for latin american countries and for the little european countries but oh these big european countries like france like italy like spain oh no no no
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austerity is bad for them what we need is some sort of monetary loosening of some sort and that's where we have l.t.r. rose i mean we're going to have morrow is a long term refinancing operations it's essentially the banks the central bank the e.c.b. is lending free money to the banks and they in turn are taking this money and using it to prop up the bond markets it's basically stealth monetization and this is what the united states did where ben bernanke he lent out as bloomberg reported seven point seven trillion dollars between loans warranting guarantees to the too big to fail banks now they took that money and invested it in u.s. treasury bonds now it seems that the l.t.r. oh operations are going on with the c b that are projected to you on during the year two thousand and twelve which are expected to be about a trillion euros are going to be in that direction basically stealth wanted as they should and so what we're going to see is a continued deterioration of the euro against the dollar and specially against gold
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and a propping up any muddling along of the european situation and there is got going to be any austerity and so far spain. italy or france are concerned so this talk of us territory it's just purely cosmetic and just for the headlines it's not real how can these organizations be so professionally and competent i mean if people go if you go to a doctor and he say no i've got a chest pain and he gives you a colon osca pay you know henri amputate your foot and you would be rightfully upset and sue him and you wouldn't consider him to be a serious doctor but when you go to the financial doctors a christine legarde at the i.m.f. and they seem to be incompetent on this scale they seem completely oblivious to the reality of economics and finance why either egg well why don't why don't people why don't they just revolt i mean this is work in the past why don't people just revolt i why are they putting up with this that's a good question that's the million dollar question i mean i think that basically these people are just dressed in nice suits but they're empty suits they're just
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fools for the most part or there are people who are so craven in their need for political support and political opprobrium that they will do anything to keep happy the powers that be or the politicians at the ultimately have to respond to ok let's talk about spain's unemployment rate as recently jump to twenty three percent suicides are soaring and grace these are the sort of conditions that you know we've seen before in a lot america that leads to work dictatorships right is that in the cards now i think what we're going to see are populist politicians making hay from the current economic downturn where you're going to see is for instance people like marie le pen really going out there and saying oh we don't need this euro all our problems started when we joined the euro zone let's get out of the euro zone they're going to have those politicians in spain and italy and france they're all going to be saying that same two and they are going to get political traction they're going to get the vote and will be scapegoated this time who will be scapegoated i think is going to be bankers and i think it's going to be politicians who are numbered of
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the euro zone the one continent supercontinent idea i think those are the politicians who are going to suffer and the bankers i thing. they are going to suffer if there is a populist politician who is able to transform people's discontent into votes right now we recently interviewed warren pollock and he said he believes that bank holidays are eminent what are your thoughts on this i don't think there's ever going to be any kind of bank holiday in the near term future i think it's fun to imagine oh a bank holiday and like they're all hell breaking loose and all the rest of it but it's not going to happen for a very simple reason any kind of bank holiday in any country no matter how small greece portugal is going to be like a giant red flag and so the bottle and cheese are going to go after that particular country and everybody is going to panic a bank holiday would create more trouble and more panic then simply muddling along and having the e.c.b. continue with monetization that was the argument for lehman brothers collapsed and
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the composition of lehman brothers is not far behind and ireland or portugal you know is roughly equivalent the same size it was a stomach lead to important and i come out of collapse and yet because of some wrangling that was done in the boardrooms of these banks on wall street for a lot of personal reasons we find out later animosities between these guys they simply let lehman collapse and we had this huge collapse in two thousand and eight so that was a bit of a bank holiday for lehmann and bear stearns and and there was a credit seizure in these global markets wasn't official bank holiday but the global credit froze right now well but that's that's different right that's basically you have a credit crunch is it going to happen again i actually don't think so because i think that these particular dogs have learned their lesson ben bernanke druggy the respectively the head of the federal reserve and the e.c.b. the european central bank what they're going to do is they're going to put out as much liquidity as possible to prevent any kind of two thousand and eight liquidity crunch because that was the last quite
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a crisis that they know for instance at this point in time they are not afraid of inflation because they think oh inflation is so seventies we're over that so we have to worry about inflation. we have to worry about the quiddity crisis and so the next time we have a liquidity crisis we're going to have so much cash sloshing in the system that there is not going to be a two thousand and eight situation but think they they can create inflation they would love to see some inflation they can't seem to create inflation for every trillion in fresh credit they force into this this is a dead duck of an economy there's another five trillion suddenly in losses on banks' balance sheets that were not disclosed that more than cotton heated up about liquidity and it actually net net it's deflationary spiral continues unabated there is there's not there's no there's no way to stop this credit i'm not sure i'm not quite so sure look the situation and i agree with you that
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a lot of the losses sort of seem to sterilize a lot of the money printing going on but you do have to look at certain key commodities particular particularly the copper. oil and gold no gold is reached historic highs against the euro we have oil up there over one hundred we have copper comfortably over three fifty so we're seeing that the possibility of inflation is not far away i would like in the situation to sort of like building a really big bonfire with a lot of dry tinder and throwing gasoline on it and you think well there's no fire but it only takes a single match once that match gets thrown in you know it's five an hour to the whole bonfire all right well there seems to be a bit of a split because the fifth place ternary contraction that's changing the global markets have repositioned gold from being a commodity to being a currency same thing for oil to a lot of agrees it's now currency and to some degree could argue that maybe not so
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successfully with copper but so this is what's driving action in those markets versus some inflationary. but i want to switch gears for a second former war reporter chris hedges is suing the u.s. government over the n d a the national defense authorization act he believes the n b a the course but corporations and banks preparing for economic meltdown to which they are will need to deploy military on the streets he's making this connection your thoughts. that they will ever deploy military on to the streets. they already have i mean if you start looking in every american city you have. homeland security agents who are stopping people when they get out of trains you know to check to see if they have explosives or just sort of ridiculous i think that you know the possibility of the united states becoming a police state. it's we're already there so i don't exactly see what exactly the point is i think that chris hedges i respect him and i wish him the best of luck i
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think that he's just going to be spinning his wheels i think we saw here also is that it's pretty it's a proper tory act assuming that there is a revolution in america and the corporations who are going to be on the the gallows of this big they're taking the same d.n.a. as a way to authorize or make it easier for them to let's say hire mercenaries are blackwater arrest people for no cause this type of thing oh i think it's a lack of education and the fact that we have such a. education system in the united states sort of like is paying off for a lot of people who want to you know cover over what's going on because in in more educated populace the kinds of things the things that are going on in the united states would not be allowed but they are happening in the united states the n.d.a. you know this this issue with chicago that they're going to privatized their police force or something it's a dreadful despicable but people are just saying oh it's no big deal and i think what's happening is that people are thinking it's not going to affect me so why
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should i care now that is the end of a democracy when people start thinking and i think that's the point that has been reached. in the united states that people say since it doesn't affect me why should i care oh my neighbor gets dragged away by blackwater's you know people maybe he must have done something so i'm just going nor it now when you travel around europe gonzalo over the past few weeks what are some of the economic differences you notice and what you see kind of in the us how would you contrast it things are seem to me being here they seem to be better than the united states there is the level of desperation that you're seeing in the united states and the level of panic that you're seeing in the u.s. which is really surprising the other thing that i'm noticing is that the people in europe recognize the crisis that they have but they seem to feel that oh they'll muddle along which i think is what most people think whenever they're in the middle of an economic crisis they don't think that this is the end of the world they figure that they'll muddle along and you know it'll get better just around the corner now whether that's true or not i hope it is but i don't think so i do think
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though that at this point in time it's looks like europe for all its problems it's over deadness of the problems of the eurozone seems to be in a lot better shape than the united states right so betting man would if you were to pick a country or two that you'd want to hang out during this global economic apocalypse what's at the head of the list. france i really low friends i mean i know that we're going to be at a for the food is great but i mean you know i could get your head you know into the game we're going to. talk to me more you know specifically about you know i mean this is the smartest countries to go to at this point in time would be countries that you feel would be protected from a variety of threats that are currently in the air number one the environmental problems that we're having in the united states and so far as fracking is concerned the possibility of nuclear accidents in europe and japan and the united states again the problem the possibility or rather if not probability that in the united states are going to have severe capital controls and you already have capital
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controls in europe so i think that all of these would lead you to think that. probably the southern hemisphere is where you have to go now the other him as a mystery being south africa australia new zealand chile argentina europe what those seem to be the countries that would be the safest to go but the same time you have certain environmental problems that are going on in chile insofar as pollution and so on jago you also have a fairly strict control system they don't want money to just fly in fly out of chile and so you have the possibility of that then in australia new zealand you have the possibility that the australian and or new zealand government will wind up cooperating with the american government in terms of extraditions in terms of you know renditions stuff like not so each of them has pros and cons and you have to weigh them for yourself but it looks objectively like the southern hemisphere is where you want to go alright gonzalo lira thanks so much for being on the kaiser report thank you for having me all right not going to do it for this edition of the
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kaiser report with me max kaiser stays in her arm i guess because all the. s p g dot com want to send me an email please do so because the report at r t t v dot ru you can follow me on twitter of course max kaiser and i like tons of nice guys are signed by all.
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well. it's technology innovation all believes developments around russia we've got the future. peacemaking mission a delegation led by russia's foreign minister heads to damascus as bloodshed in syria gathers momentum against a backdrop of diplomatic license. sacrifices fifteen thousand jobs have been to appease the international creditors. population status the general strike. in essential oil off the arab documents discovered in libya
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